Nepal Rastra Bank to Invest Over Rs 4 Billion From Grant and Pension Fund as Institutional Deposits

Nepal Rastra Bank (NRB) has decided to invest more than Rs 4.35 billion from its Grant and Pension Fund as institutional deposits. The central bank has issued a notice calling for proposals from banks and financial institutions interested in receiving these funds as term deposits.

According to NRB, interested institutions must submit their proposals by Mangsir 23, specifying the amount they wish to accept as institutional deposits and the interest rate they are willing to offer. The deposit tenure has been fixed at 366 days, spanning from December 14, 2025, to December 14, 2026.

The allocated investment amount is divided as follows:

• Commercial Banks: Rs 3.48 billion

• Development Banks: Rs 652.5 million

• Finance Companies: Rs 217.5 million

To qualify for participation, banks and financial institutions must have completed at least two years of operation and meet several regulatory and financial conditions set by NRB.

Key eligibility criteria include:

• Maintaining minimum regulatory capital, including buffer capital

• Non-performing loans (NPA) below 8% of total loans

• Net NPA not exceeding 3%

• Net liquid assets at least 20% of local currency deposits

• Compliance with NRB’s loan-to-deposit ratio and capital adequacy norms

• Posting positive operating profit in the latest fiscal year

• No directors or CEOs currently serving who were previously fined by NRB

• If previously under prompt corrective action, the institution must have been released from it for at least six months

• The institution must not be classified as a “problematic bank” under NRB Act 2058, or if it was, at least six months must have passed since its release

• Real estate loan exposure must be within the regulatory limits

NRB believes that mobilizing the Grant and Pension Fund through secure institutional deposits will help ensure better returns on the fund while supporting liquidity management within the banking sector.